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Monday, August 19, 2013

Faulty wine & funny money & the irresponsibility of the wine trade

Chapter One

It all began so simply. In London, one day in January 2014, the wine
writers Tom Nutkin, Albert Joshua and the superstar German winemaker Dr Titan
were having lunch with Nicholas Interr of Interr Brush &Rod, when the conversation turned to the
plight of the independent wine retailer in the face of competition from
supermarkets. Then Joshua brought up the idea of “local currencies” like Berkshares in Massachusetts
in the US, and The Lewes Poundin Sussex in the UK. Both of these are currencies that have been devised
to encourage people to give their custom to shops and businesses in their local
area. What if the wine world introduced its own money? People who bought their
wine from an independent retailer could be given rewards of one kind or another
to encourage them to return. The currency might even help growers in some way…
The idea caught the four men’s imagination and before long they were casting
around for a name for it. Nutkin’s first suggestion was “Plonc”, combining
“plonk” with the sound of the late-lamented “franc”. Titan came up with
Winegeld while Joshua’s best shot was WiRos. Whatever the name, the challenge lay
in the technical challenges of creating a new currency, and it was at this
point that Joshua remembered a banker he’d once met on a plane. What was his
name? Ivo or Ivor something…

Chapter Two

On the other side of the Atlantic, wine-loving New York bankers Ivor
Biggasella and his friend and sparring partner Noah Udonot and a couple of
their high-flying friends made their way through the January snow in Manhattan
one Friday evening to play a little poker and open a few old bottles. The guys
were in a good mood - two had just had their bonuses and Ivor had had a very
good week, so there were some pretty serious labels on the table; after a few
minutes work on his Blackberry, Noah calculated that, between them, they added
up to 973 points (taking the highest number from either the Advocate, Spectator
and Enthusiast naturally) and one of the others gamely offered to buy a bottle
“of any old shit” to scrape them into four figures.

The evening kicked off with a light, refreshing 17% Napa Cab, “to get
us in the mood”, which was followed by a 1990 first growth which, it was
generally agreed, was just a little bit corky. The Chateauneuf that came next
was delicious, but the brett on the Grand Cru Classé St Emilion, its successor,
was frankly disgusting. A pair of gold-hued 1990 white Burgundies were
sufficiently oxidised to be undrinkable, but the 1986 Chablis was declared
divine. Sadly, the 1990 magnum third growth Medoc was too badly tainted by TCA
to serve, so the screwcap Barossa Shiraz was greeted with delight. There was
some discussion over whether it was another brett victim or simply hugely
reduced, but by this stage of the evening, the four men were becoming rather
less fussy.

Looking at the bottles, Ivor waxed philosophical. “You know, guysh”, he
slurred, “I really think that itsh the unpre… unpredic…dic… atibility of wine
that I love mosht about it. The trouble with money,” he continued “ish that
itsh all the shame. Ev’ry ten dollar bill is worth the shame as the neksht one.
Itsh got no romansh”.

“So”, replied his old friend, Noah, who was slightly better at handling
his drink, “why don’t we invent romantic cash?”. Ivor looked at him blurrily
but with obvious interest.

“What we need to do”Noah went on, “is create a currency that behaves
like these bottles…” He was going to say more but noticed that Ivor’s eyes had
closed and a quiet, alcohol-induced purring sound was escaping from the
banker’s fleshy lips.

The next morning, however, as the two men crawled into a bar in search
of a bloody mary for breakfast, Ivor noticed an email from a name he didn’t
recognise. Albert Joshua? Slowly an image came to mind of a disheveled little
limey he’d met on a flight and with whom he’d talked about California wine…
Reading the email, Ivor began to recall the conversation of the previous night…

Chapter Three

Within a week, Biggasella, Udonot, Nutkin and Joshua were sitting
around a table in a charming wine bar in Paris called Les Infantiles. With the
Brits’ wine knowledge and connections and the Americans’ cash and banking
contacts, it soon looked at though the idea could actually be transformed into
reality. After some argument, it was decided to peg the new currency (which now
seemed set to be called the Grapee in honour of the banker’s recently-acquired
Indian-Italian wife, Chiara Masutra) to the US dollar rather than the pound or
the Euro which the bankers were convinced was doomed. The only hurdle was
Biggasella’s insistence on maintaining the “romantic” aspect of the new
currency. He proposed that it be printed in batches and on special paper made
from equally special Portuguese bark harvested in forests in need of
protection. Every batch would be different and subject to the variations to
which this particular bark and paper are prone. Some notes would become brittle
and break into small pieces; others would simply crumble into dust, while the
occasional example would develop beautiful natural patterns that would turn it
into an art object worth far more than its face value. The way the notes would
be printed would add another level of unpredictability, thanks to natural
organic ink that sometimes fades completely, rendering the notes worthless.

“But why are we talking about paper notes?” Nutkin asked. “Surely,
they’re a thing of the past.”.Biggasella looked at the Englishman shrewdly. “Yes, of course they are.
Like printed books, vinyl music… and natural corks. We’re saddled with them for
the moment. But you’re right of course, which is why we follow the route of the
Bitcoin by introducing the digital version - which will be just as
unpredictable. Every digital “note” will have a unique number, just like a
printed bank note, and random variability will be built into the software. So,
you’ll change $1000 into ten 100-grapee notes. And you’ll have a 1-5% chance of
any of those notes going up in value, or losing its worth completely. And the
algorithm will regularly set the variability to reflect the real incidence of
wines turning out to be better or worse than expected. We’ll base that on data
from events like the International Wine Challenge.”

When the Brits gently suggested that this all seemed, well, a little
complicated, Biggasella pointed out that he’d backed Twitter in the days when
people were laughing at the idea of expressing oneself in 140 characters.
“People sometimes like to make things hard for themselves” he said, “And we’re
not talking about normal people here. We’re talking wine people”.

Chapter Four

Despite its unappealing name, the Grapee took off surprisingly well,
and within a few months wine lovers globally were distinguishing themselves by
flashing Grapee notes and taking advantage of the tastings and discounts that
merchants were happy to give them in return for their loyalty. When the main
auction houses announced that they would deal in Grapees, it seemed clear that
they were set to become a permanent part of the wine scene.

Then, on Jun 24th Lee Tidgious, a New York-based former
lawyer bought 12 mixed cases of 1992 white Grand Cru Burgundy for a party to
celebrate his 22nd wedding anniversary with his 200 closest friends.
The purchase was made from from Flakeys, a US merchant that had just joined the
Grapee scheme and Tigious paid the $90,000 bill using 90 1,000-Grapee notes.
Two days later, Tidgious was contacted by Flakeys to say that 31 of his notes
had crumbled into dust and requesting that he replace them. When Tidgious
replied that variability was the nature of the new currency, the merchant
responded that one bad note in three was too high a percentage, and suggesting
that Tidgious must have been aware of the higher-than-average unreliability of
his Grapees.

Tidgious immediately made a counter-claim. 103 of the 144 bottles he
had bought were, he said, too oxidised to be drinkable. Worse still, he sued
for $5m for the distress and financial loss the faulty bottles had caused him.
In particular, he pointed out, he had been relying on some of the bottles of 1992
Montrachet to help secure a lucrative deal with the rapper-turned-banker Ee-Z
Munnee, and the sherry-like nature of the wine had not impressed the musician
who’d wittily responded with

“I had much better En Rama

In my glass last summer…

Sitting in my Hummer

With my man Obama

Sorry dude, your burg’s a bummer”

Independent experts supported Munnee’s and Tidgious’s assessment of the
wines and the case went to court. After a long and involved set of hearings,
Justice Sol Oman, the presiding judge, a teetotaller, made a number of pointed
criticisms of Flakeys and its fellow fine wine merchants. “Over the last
weeks”, the judge said, “we have heard a long list of distinguished experts
tell us about the incidence of premature oxidation in white Burgundy from the
1990s. Listening to them, it seems to me as though it’s not a matter of the
odds of getting a bad bottle; its the poor odds on getting a good one. And yet,
you merchants have gone on selling these wines like car salesmen handing out
cars with potentially dodgy brakes. Taking customers’ money - hundreds of
dollars per bottle - with this knowledge, and without sharing it with them, is
not just irresponsible. It’s tantamount to fraud”.

The judge, who had clearly learned a lot about the wine industry during
the case, concluded, “Yes, I know that some customers have been refunded for
their faulty white Burgundies, but I’d like to see a spreadsheet that sets the
refunds against the faulty bottles. In fact, I’d like to see how much is
refunded for ALL the faulty bottles you guys admit to selling. We heard the
spokesman for the BIVB - the body responsible for promoting Burgundy - say that
the number of cork-tainted bottles has “dropped” to 2% from its previous 8%.
Have the wine producers who sold those bad bottles handed back up 2-8% of their
turnover? Has the cork industry been forced to reimburse them for their loss of
income?

“Your Grapee is clearly a ludicrous idea - the kind of thing that could
only be conceived by a crazy mind - but it’s no crazier than an industry that
knowingly trades in faulty products and shrugs off the faults as ‘romantic.’”
The court found for Tidgious, awarding him all the damages he had claimed.

The impact of the case was immediate. Trading in Grapees was suspended
and the brand was bought - very cheaply - by Direct Wines who obliged holders
of the currency to spend it on specially selected “Grapee Dozen”cases. Unreliable notes and digital payments
were no longer accepted.

Far more significantly, however, within weeks, a number of products
were launched that claimed to help consumers analyse wines for a wide range of
faults. Tidgious started a new business of his own: an insurance scheme based
on the ones covering the travel industry. Anyone buying a faulty bottle from a
bonded merchant was now secure in the knowledge that he or she would always be
fully refunded, while the producers, transporters and closure suppliers lived
in fear of the financial implications of selling wine that failed to come up to
scratch. The only exception to this rule were the “natural” wine producers and
suppliers who obliged their customers to sign a form absolving them from any
responsibility for the reliability of their wares.

Postscript

As usual, my whimsy is founded on several nuggets of truth. The Grapee
may be a figment of my fevered imagination, but do read up about the Bitcoin
and decide just how far from reality my crazy wine-currency might be.

In 2011, Decanter’s report on White Burgundy premature oxidation
included the comment from Bill Nanson of burgundy-report.com that ‘At least a
dozen vintages…have a propensity to self-destruct’,while an anonymous UK wine merchant said that
white Burgundy is still ‘unreliable’. A website devoted to“premox”
Burgundy suggested that nearly a third of 2005 white Burgundies suffered from
the problem, with 1996, 1999 and 2000 all showing premox figures of over 25%.
Wine-searcher currently lists 270 Meursaults, Chassagne and Puligny Montrachets
from the 2005 vintage. Take a look at the prices for those wines - and consider
how you feel about paying £100 or more for a a bottle with a nearly 1-in-3
chance of being a dud.

Anyone interested in learning the names of the
“safest” and “most dangerous” producers should take a look at this Winebereserkers forum

In another forum, Nanson says “I don't think I ever experienced more corked wines than from
1999. Truth be told I have trepidation for every (good) bottle I open from
1995-2000.And in this Burgundy Report
post, he quotes the BIVB figures of “only” 2% cork-tainted Burgundies - a
figure that matches his own experience.

I have chosen to use Burgundy, premature oxidation and cork taint as examples, but I might have opted for a wide range of other wine industry faults. If the Burgundians knowingly went on selling wines they suspected or knew to be flawed, the same was true of some Bordelais - and others - in the 1980s and early 1990s, for example, who happily sold wines that were badly TCA-tainted following timber-treatment in the wineries. And then there are the producers that have shipped - and still ship - horribly brett-spoiled wines.

So, if you are tempted to respond to this piece, I beg you NOT to focus on oxidised white Burgundy or cork-related spoilage. Think instead of all the faulty wines you have encountered over the last years or so and ask yourself how often you got – or asked for – reimbursement.